Singapore Stock Exchange to Use Blockchain for Improved Settlements Efficiency

The SGX (Singapore Stock Exchange) has announced a partnership with the Monetary Authority of Singapore (MAS) in a new blockchain venture that will see increased efficiency in securities settlements, according to the official press release. The partnership also includes Anquan, Deloitte and Nasdaq, and focuses on tokenized assets. The release states: “This will allow financial institutions and corporate investors to carry out simultaneous exchange and final settlement of tokenized digital currencies and securities assets, improving operational efficiency and reducing settlement risks.”

Anquan, Deloitte and Nasdaq will focus on producing a report by the end of the year that outlines the possibility of settling DvP (Delivery versus Payment) – “a settlement procedure where securities and monies are simultaneously exchanged to ensure that delivery of securities occurs if and only if the corresponding payment is made” – automatically, via the use of smart contracts.

MAS Chief Fintech officer, Sopnendu Mohanty, said:

Blockchain technology is radically transforming how financial transactions are performed today, and the ability to transact seamlessly across blockchains will open up a world of new business opportunities. The involvement of three prominent technology partners highlights the commercial interest in making this a reality. We expect to see further growth in this space as FinTechs leverage on the strong pool of talent and expertise in Singapore to develop innovative blockchain applications and benefit from the new opportunities created.

Meanwhile, the SGX Head of Technology, Tinku Gupta, who will also chair the project, said:

This initiative will deploy blockchain technology to efficiently link up funds transfer and securities transfer, eliminating both buyers’ and sellers’ risk in the DvP process. This is a collaborative innovation bringing together multiple players to pursue real-world opportunities that will benefit the ecosystem.

This is the result of Project Ubin, which started back in 2016. Phase 2 will see the Anquan, Deloitte and Nasdaq part of the project brought to the fore.